I have schedule Payments table were it has all the Payment schedule information
(e.g)

tbl_Schedule_payment

ScheduleID,Startdt,EndDt,PaymentAmt,Freq

Sch1,01/01/2012,12/31/2012,$50.00,Monthly

My question is how I can design tbl_Schedule_payment to be used by both Individual Payee and Insurance meaning we should be able to setup payment schedule to both Individual Payee and Insurance for a single customer

Would you be open to using a surrogate key Uniqueidentifier for PayeeID and Insurance ID and use it for left outer joins on a intermediate table which maps the the schedule table. Since the GUID is unique your assured of the rigth mapping without having
to add a column to identify the type of relationship and you would also have the tables loosely coupled to make any future extensions as well.